The Income Statement columns in the end-of-period spreadsheet show that debits are equal to $55,800 and credits are $77,520. What does this information mean to the accountant?

A) net income of $21,720
B) net loss of $21,720
C) the accounts are out of balance, indicating an error has been made
D) the accounts have not been updated

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period of time, indicating its profitability.

Debits

Entries on the left side of a double-entry accounting system that increase assets or expenses or decrease liabilities, equity, and income.

Credits

In accounting, credits refer to the side of an account that decreases assets or increases liabilities and equity.